New jersey internet gaming regulations may 13 2013_draft_

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Proposed new N.J.A.C. 13:69O-1.4 prescribes Internet or mobile gaming system standards and operational controls. These include: (1) security measures to ensure that patron access is limited to the Internet or mobile account holder; (2) design specifications for an Internet or mobile gaming system to detect and report suspicious activity, as well as excluded or prohibited persons; (3) storage requirements for and encryption of patron account access information; (4) treatment of suspended and deactivated patron accounts; and (5) daily dollar limits for patron funding of Internet or mobile gaming accounts.

Proposed new N.J.A.C. 13:69O-1.5 sets forth technical specifications for a “server-based gaming system,” as defined in proposed N.J.A.C. 13:69O-1.1, encompassing all hardware, software, and communications that comprise a system utilized for the purpose of offering electronic versions of authorized casino games where material aspects of gaming functionality occur at the server level. The section further sets forth requirements for “server-based games,” which is also defined in proposed N.J.A.C. 13:69O-1.1, encompassing all gaming conducted by way of a client (patron) terminal where the outcome of a game is determined by a random number generator maintained on a server or a dealer verifies the outcome from a simulcast table game.

Proposed new N.J.A.C. 13:69O-1.6 sets forth requirements and procedures for the conduct of table game simulcasting including the use of a simulcast control server and the provision of patron information about wagering conducted during table game simulcasting.

Proposed new N.J.A.C. 13:69O-1.7 establishes communications standards for all “gaming systems,” defined in N.J.A.C. 13:69O-1.1 as either a server-based gaming system, an Internet gaming system, a mobile gaming system, or a table game simulcasting system. These include standards for encryption, masking, and secure methods of communication transfer.
Proposed new N.J.A.C. 13:69O-1.8 requires gaming systems to be capable of maintaining a separate copy of all information pertaining to each patron gaming session, including patron game play and account activity histories, the installation and removal of software from a gaming system, promotional offers, and adjustments to gaming system data. The copy of logged information shall be on a separate and independent logging device or secure transaction file configured within the gaming system.

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New jersey internet gaming regulations may 13 2013_draft_

  1. 1. 45 NJR 6(1)June 3, 2013Filed May 13, 2013LAW AND PUBLIC SAFETYDIVISION OF GAMING ENFORCEMENTInternet and Mobile GamingApplicationsForms; Information; FeesCasino LicenseesMaintaining Agreements; Filing of AgreementsCasino Operation Accounting Controls and StandardsCasino Licensee’s Organization; Standard Financial and Statistical Reports; NetworkSecurity for Internet, Mobile, or Server-Based Gaming SystemsExclusion of PersonsPersons Required to be Excluded; Self-Exclusion; Forfeiture of Winnings by ProhibitedPersonPersons Doing Business with Casino LicenseesDefinitions; Gaming-Related Casino Service Industry Enterprise License RequirementsTaxesGross Revenue Tax; Internet Gaming Gross Revenue TaxDescription of Taxes; Definitions; Tax Year; Tax Payer; Computation of Taxes; Return andReports; Examination of Accounts and Records;Deduction for Promotional Gaming CreditsProposed New Rules: N.J.A.C. 13:69A-5.19 and 7.17 and 13:69O
  2. 2. 2Proposed Amendments: N.J.A.C. 13:69A-9.4 and 9.8; 13:69C-10.2; 13:69D-1.6 and 1.11; 13:69G-1.1, 1.2, 1.3, 1.5, 1.7, 2.1, 2.2, 2.3, 2.4, and 3.2; 13:69J-1.1 and 1.2; and 13:69L-1.1, 1.2, 1.3, 1.4, 1.5,1.6, 1.7, 1.8, and 1.11Authorized By: David A. Rebuck, Director Division of Gaming Enforcement.Authority: N.J.S.A. 5:12-5, 12, 38a, 69, 70, 76, 82, 92, 100, 104, and 129.1.Proposal Number: PRN 2013-099.Submit written comments by August 2, 2013 to:Lon E. Mamolen, Deputy Attorney GeneralDivision of Gaming Enforcement1300 Atlantic AvenueAtlantic City, NJ 08401The agency proposal follows:SummaryEffective August 8, 2012, the Casino Control Act, N.J.S.A. 5:12-1 et seq. (Act) was amended topermit, among other things, the use of mobile gaming devices within casino hotels in Atlantic City. SeeP.L. 2012, c. 34. Thereafter, and effective October 8, 2012, the Division of Gaming Enforcementtemporarily adopted rules to implement mobile gaming. See 44 N.J.R. 2301(b).The Act was amended again, effective February 25, 2013, to authorize Internet gaming withinNew Jersey through licensed casinos operating in Atlantic City. See P.L. 2013, c. 27.The Division proposes new rules and amendments to implement mobile and Internet gamingconsistent with the enabling statutes.Proposed new N.J.A.C. 13:69O encompasses rules governing many aspects of Internet andmobile gaming regulation. Additionally, proposed amendments integrate mobile and Internet gaming
  3. 3. 3rules within certain sections of other chapters of the Division’s rules governing applications, gamingoperation accounting controls and standards, persons doing business with casino licensees, and taxes.Proposed new N.J.A.C. 13:69O-1.1 sets forth definitions of words and terms used in the newchapter. These include terms that are used to prescribe requirements for Internet gaming and mobilegaming and to describe features of Internet and mobile gaming accounts, system standards, andoperational controls.Proposed new N.J.A.C. 13:69O-1.2 delineates general requirements for Internet and mobilegaming. These include (1) establishing an Internet or mobile gaming account; (2) screen displays uponsystem log on; (3) geo-locator within an Internet or mobile gaming system and mobile gaming systemdisablement of gaming activity whenever a client terminal is removed from property boundaries; (4)client terminal software; (5) supervisory personnel specifically responsible for the operation andintegrity of Internet and mobile gaming; (6) filing of internal controls and their content; and (7) locationof primary and backup equipment used to conduct the gaming.Proposed new N.J.A.C. 13:69O-1.3 sets forth procedures and requirements governing patrons toestablish an Internet or mobile gaming account, permissible funding sources, and the provision ofaccount statements on demand. The section also provides a list of certain State and Atlantic Citygovernment position holders and casino key employees who are persons prohibited from establishing anInternet or mobile gaming account.Proposed new N.J.A.C. 13:69O-1.4 prescribes Internet or mobile gaming system standards andoperational controls. These include: (1) security measures to ensure that patron access is limited to theInternet or mobile account holder; (2) design specifications for an Internet or mobile gaming system todetect and report suspicious activity, as well as excluded or prohibited persons; (3) storage requirements
  4. 4. 4for and encryption of patron account access information; (4) treatment of suspended and deactivatedpatron accounts; and (5) daily dollar limits for patron funding of Internet or mobile gaming accounts.Proposed new N.J.A.C. 13:69O-1.5 sets forth technical specifications for a “server-based gamingsystem,” as defined in proposed N.J.A.C. 13:69O-1.1, encompassing all hardware, software, andcommunications that comprise a system utilized for the purpose of offering electronic versions ofauthorized casino games where material aspects of gaming functionality occur at the server level. Thesection further sets forth requirements for “server-based games,” which is also defined in proposedN.J.A.C. 13:69O-1.1, encompassing all gaming conducted by way of a client (patron) terminal where theoutcome of a game is determined by a random number generator maintained on a server or a dealerverifies the outcome from a simulcast table game.Proposed new N.J.A.C. 13:69O-1.6 sets forth requirements and procedures for the conduct oftable game simulcasting including the use of a simulcast control server and the provision of patroninformation about wagering conducted during table game simulcasting.Proposed new N.J.A.C. 13:69O-1.7 establishes communications standards for all “gamingsystems,” defined in N.J.A.C. 13:69O-1.1 as either a server-based gaming system, an Internet gamingsystem, a mobile gaming system, or a table game simulcasting system. These include standards forencryption, masking, and secure methods of communication transfer.Proposed new N.J.A.C. 13:69O-1.8 requires gaming systems to be capable of maintaining aseparate copy of all information pertaining to each patron gaming session, including patron game playand account activity histories, the installation and removal of software from a gaming system,promotional offers, and adjustments to gaming system data. The copy of logged information shall be ona separate and independent logging device or secure transaction file configured within the gamingsystem.
  5. 5. 5Proposed new N.J.A.C. 13:69O-1.9 sets forth the required reports to be generated by the gamingsystem. These include a Patron Account Detail Report, a Patron Account Summary Report, a WageringDetail Report, a Wagering Summary Report, a Variance Report, a Dormant Account Report, aPerformance Report, and a Patron Account Adjustments Report. The required entries for each report areprescribed in various subsections. The Wagering Summary Report is to be utilized to calculate grossrevenue (for mobile gaming) and Internet gross revenue.Proposed new N.J.A.C. 13:69O-2.1 outlines the Division’s authority, pursuant to a reciprocalagreement between the State and another jurisdiction, to authorize only a New Jersey Internet gamingpermit holder to offer Internet gaming to patrons located within such other jurisdiction. Subsection (c)provides for substantial civil penalties for an organization or commercial enterprise other than anInternet gaming permit holder that makes its premises available for placing wagers at casinos using theInternet or for advertising that its premises may be used for such purpose.In conjunction with the introduction of the new rules proposed in Chapter 69O, the Division alsoproposes several other new rules and amendments to existing rules to guide the implementation ofInternet and mobile gaming.Proposed new N.J.A.C. 13:69A-5.19 sets forth the requirements for a casino licensee to file forauthorization to conduct Internet gaming by creating an Internet Gaming Permit Application (IGPA).Proposed new N.J.A.C. 13:69A-7.17, consistent with the statutory requirement, establishes theprocess for the holder of any license, registration, permit, or qualification to disclose professionalrelationships relating to legal services, consulting, or lobbying, which are related to Internet gaming.After the initial disclosure form is completed this section also establishes the requirement thatsubsequent statements are to be provided quarterly. In the disclosure form the licensee, registrant,permit holder, or qualifier must disclose the name of any person who has provided processional services
  6. 6. 6including legal, consulting, or lobbying. With respect to each of those services, the amount paid, date ofpayment, and reason for the procurement of the services shall be disclosed.Proposed amendments to N.J.A.C. 13:69A-9.4 establish the fees required to be paid by a licenseeseeking to conduct Internet gaming consistent with the enabling legislation. Under the proposedamendments an initial Internet gaming permit fee is established at no less than $400,000, and an annualResponsible Internet Gaming Fee is set at $250,000.Proposed amendments to N.J.A.C. 13:69A-9.8 include businesses that provide Internet serviceswithin the section governing licensing fees charged to other casino service industry enterprises, butexempts these enterprises from the standard fee structure, imposing the full cost of their licensure,including any investigative costs, at the hourly rate set by the Division.Proposed new N.J.A.C. 13:69C-10.2(c) establishes the requirement that agreements between acasino licensee and a casino service industry (CSI) enterprise that provide for a percentage of a casinolicensee’s Internet gaming gross revenue to be paid to a CSI are to be filed with and approved by theDivision.Proposed amendments to N.J.A.C. 13:69D-1.6 make minor changes to include Internet gaminggross revenue in the already existing revenue reporting requirement.Proposed amendments to N.J.A.C. 13:69D-1.11 modify rules regarding a casino licensee’sorganizational structure to accommodate Internet gaming. The proposed amendments require the casinolicensee’s Internal Audit Department to conduct a quarterly review of IT data security if the casinolicensee offers Internet or mobile gaming. Also, the amendments require a casino licensee to employ anIT security officer and an Internet and mobile games manager, and set forth their respectiveresponsibilities.
  7. 7. 7Proposed amendments to Chapter 13:69G integrate Internet gaming within the framework of theexclusion of persons from gaming, including self-exclusion and forfeiture. A separate Internet gamingself-exclusion list is to be maintained by the Division for those patrons who desire self-exclusion fromInternet gaming only.Proposed amendments to N.J.A.C. 13:69J-1.1 and 1.2 clarify thatcompanies providing services relating to Internet gaming are required to be licensed or registered underthe Act.Proposed amendments to N.J.A.C. 13:69L integrate and make consistent the taxation of Internetgaming with the rules relating to taxation of gross revenue. The proposed amendment to N.J.A.C.13:69L-1.7(a) deletes the requirement to file the annual tax return with the Division. This requirementwas deemed superfluous and the amendment also reduces the regulatory burden on licensees.In addition and unrelated to Internet and mobile gaming, amendments are proposed to N.J.A.C.13:69L as to the treatment of promotional gaming credits. In 2008, the Act was amended to generallyallow casino licensees to claim a gross revenue deduction for the value of promotional gaming creditswagered at slot machines. P.L. 2008, c. 12. Pursuant to the legislation, the Casino Control Commission(Commission) established procedural rules and standards for allocating the deduction to reflect the prorata share of the costs of each casino licensee pursuant to a 2008 casino industry agreement with allcasino licensees taking the deduction after participating casino operators have recouped their costs.Jurisdiction over promotional gaming credits shifted from the Commission to the Division ofGaming Enforcement in 2011 and the recoupment period has since expired. Accordingly, certaindefinitions in N.J.A.C. 13:69L-1.2, portions of N.J.A.C. 13:69L-1.6, subsections in N.J.A.C. 13:69L-1.11 that govern the treatment of promotional gaming credits during the recoupment period, andreferences to the recoupment period are proposed for deletion.
  8. 8. 8Moreover, beginning in 2013, the $90 million deduction threshold is to be prorated at a rate of$7.5 million per month, enabling the deduction to be claimed evenly during course of the year. Notably,the amount of promotional gaming credits deductible by each individual licensee on a calendar yearbasis is unchanged.N.J.A.C. 13:69L-1.7(c)1 is proposed for amendment to update an incorrect cross-reference. Thereference to “N.J.A.C. 13:69D-1.42(o)” should be to subsection (s) of that section, which will requirethat the slot machine meters are read in conformity with that section in order for a casino licensee to usean estimate for slot machine drop in completing its monthly gross revenue reports.This notice of proposal is not required to be referenced in a rulemaking calendar since a publiccomment period of 60 days is being provided. See N.J.A.C. 1:30-3.3(a)5.Social ImpactConsistent with the recent enabling legislation, the proposed new rules and amendments areanticipated to have a positive social impact on the way the public participates in gaming in New Jersey.For the first time since casino gaming was authorized in the State, some 35 years ago, members of thepublic may place wagers on games at locations outside the confines of licensed casino premises inAtlantic City. Once an Internet gaming account is established with a casino licensee or Internet gamingaffiliate, an otherwise non-prohibited member of the public may place a wager within the physicalboundaries of the State through the Internet on an approved game occurring inside a licensed casino inAtlantic City. A similar social impact may be anticipated on a much smaller scale for mobile gaming,which is limited to wireless gaming off the gaming floor but within a casino hotel facility’s propertyboundaries.The effect of the expansion of legalized gaming opportunity on the public within the State is tobe intensely studied in the years to come. The scope of the studies pertaining to the social impact would
  9. 9. 9include changes in public gaming habits, incidence of underage Internet gaming and the overall impacton compulsive gaming.Economic ImpactThe proposed new rules and amendments are anticipated to have a substantial economic impactupon Internet gaming permit holders, entities, and persons that provide goods and services to Internetgaming permit holders, and to the extent substantial revenues from Internet gaming are generated, theState itself. Preliminary discussions with casino industry representatives indicate an eagerness for swiftintroduction of Internet gaming. This, in turn, would lead to a more immediate positive economicimpact to the casino industry and the State.The proposed amendments modifying how casino licensees receive gross revenue deductions forpromotional gaming credits are expected to improve casino licensees’ ability to budget the promotionalgaming credit deduction for cash flow purposes. Since only the timing of gross revenue deductions isimplicated and not the total amount, there is no negative impact expected upon the State of New Jersey.Federal Standards StatementThe proposed amendments and new rules are authorized by the provisions of the Casino ControlAct, N.J.S.A. 5:12-1 et seq., and do not impose any requirements that are in addition to any Federalrequirements or standards. Two Federal laws are applicable to the subject of these rules. 18 U.S.C. §1084, known as “the Wire Act,” prohibits the transmission of wagering information in interstatecommerce or through an instrumentality of interstate commerce. The Federal Department of Justicereleased an opinion in December 2011 stating that the Wire Act was applicable only to sports wageringinformation. Accordingly, authorization of Internet wagering as set forth in these proposed amendmentsand new rules is not in violation of, and does not exceed, the Wire Act.
  10. 10. 10The Unlawful Internet Gaming Enforcement Act, known as “UIEGA,” 31 U.S.C. §§ 3163through 3167, prohibits gambling business from knowingly accepting payments from any personengaged in interstate Internet wagering, which is unlawful under Federal or state law or intrastateInternet wagering that is illegal under state law. As these rules authorize intrastate Internet wageringand specifically require gaming participants to be located within New Jersey, these rules conform toFederal law and do not impose any standard beyond what is required under Federal law.Jobs ImpactNew employment opportunities associated with the start-up and implementation of Internetgaming in Atlantic City pursuant to the Internet gaming statutes are anticipated. If, as a result of Internetgaming, some gaming patrons are dissuaded from travel, the casino industry may experience somedecrease in onsite gaming with an associated adverse impact on the gaming and derivative casinoworkforces. To offset any potential decrease in patron visitation to Atlantic City, effective marketingand promotional efforts through casinos licensees’ Internet gaming operations could induce a greaternumber of gaming patrons to travel to Atlantic City. In this scenario, Internet gaming may become aboon to the Atlantic City casino workforces. Further, increased casino revenues realized throughInternet gaming may result in the expansion of existing casino facilities and, thereby, greater workforceneeds.Agriculture Industry ImpactThe proposed amendments and new rules will have no impact on agriculture in New Jersey.Regulatory Flexibility AnalysisThe proposed amendments and new rules will affect the operations of New Jersey casinolicensees, none of which qualifies as a "small business" as defined in the Regulatory Flexibility Act,
  11. 11. 11N.J.S.A. 52:14B-16 et seq. In addition, the proposed amendments and new rules will affect entities andpersons who conduct business with casino licensees in their offering of Internet or mobile gaming.These entities and person may be regulated as ancillary casino service industry enterprises, some ofwhich may qualify as a “small business.”Further, under the enabling legislation and Division rules, the holder of any license, registration,permit, or qualification is initially required to disclose and maintains a continuing duty to quarterlydisclose professional relationships relating to legal services, consulting, or lobbying, which are related toInternet gaming. Thus, certain additional reporting, recordkeeping or other compliance requirements arerequired of certain individuals and enterprises beyond those in the normal course of their employmentsor businesses, as discussed in the Summary above. Costs of compliance with the requirements would beexpected to be commensurate with the nature and scope of these professional relationships. However,these persons and entities are not expected to require additional professional services in order to complywith the requirements.Housing Affordability Impact AnalysisThe proposed amendments and new rules will have no impact on the affordability of housing inthe State of New Jersey and there is an extreme unlikelihood that the rules would evoke a change in theaverage costs associated with housing because they affect the regulation of casinos in Atlantic City andtheir Internet and mobile gaming operations in the State.Smart Growth Development Impact AnalysisThe proposed amendments and new rules will have no impact on the achievement of smartgrowth development in the State of New Jersey and would not evoke a change in housing production inPlanning Areas 1 or 2, or within designated centers, under the State Development and Redevelopment
  12. 12. 12Plan because the rules affect the regulation of casinos in Atlantic City and their Internet and mobilegaming operations in the State.Full text of the proposal follows (additions indicated in boldface thus; deletions indicated inbrackets [thus]):CHAPTER 69AAPPLICATIONSSUBCHAPTER 5. FORMS13:69A-5.19 Internet Gaming Permit Application(a) An Internet Gaming Permit Application (IGPA) shall be in a format prescribed by theDivision and include the following:1. The date of filing;2. The name of the casino licensee or applicant for casino licensee;3. The name, title, and telephone number of the contact person;4. Whether the application is for an initial application or renewal; and5. The signature of an authorized officer of the applicant.(b) An IGPA shall be filed 30 days prior to the expiration of a licensee’s current Internetgaming permit.(c) An IGPA shall be filed, accompanied by the appropriate fee, to members of the Divisionstaff as the Director may designate.
  13. 13. 1313:69A-7.17 Disclosure requirements for legal, consulting and lobbying services related toInternet gaming(a) Pursuant to section 85h of the Act, each entity or person who is an applicant for or holderof any licensee, registration, permit, or qualification shall provide an Internet Gaming DisclosureStatement to the Division no later than December 31, 2013 and quarterly thereafter. Each newapplicant for any licensee, registration, permit, or qualification shall file an initial InternetGaming Disclosure Statement with their application and quarterly thereafter.(b) The initial Internet Gaming Disclosure Statement shall disclose the required informationfrom July 1, 2009 through the date of the initial statement. The statement shall include thefollowing information:1. The name of any person, entity, or firm to whom or from whom any payment,remuneration, or other benefit or thing of value has been made or conferred for professionalservices, including, but not limited to legal, consulting, and lobbying services;i. For each such person, entity, or firm identified in (a)1 above:(1) The amount of value of such payment(s), remuneration, benefit, orthing of value;(2) The date on which such payment(s), remuneration, benefit, or thing ofvalue were made or received; and(3) The reason or purpose for the procurement of such services.(c) Quarterly Internet Gaming Disclosure Statements required pursuant to this section shallbe due no later than 15 days following the end of each calendar quarter in accordance with thefollowing schedule:First Quarter April 15
  14. 14. 14Second Quarter July 15Third Quarter October 15Fourth Quarter January 1513:69A-9.4 Casino license fees(a) For the purposes of this section, the following words and terms shall have the meanings hereinascribed to them unless a different meaning clearly appears from the context:1. – 2. (No change.)3. "Casino operator" means a casino licensee is designated as the primary obligor forpayment of gross revenues taxes and Internet gaming revenue taxes in accordance with N.J.A.C.13:69L; [and]4. “Internet gaming permit fee” means the total fee that is required by the Act and thissubchapter to be paid prior to issuance or renewal of an Internet gaming permit;[4.] 5. “Initial license fee” or “[Issuance] issuance fee” means the total fee, which is required bythe Act and this subchapter to be paid prior to consideration or issuance of a plenary casino license to anunlicensed applicant and which is based upon the cost of investigating and considering theapplication[.]; and6. “Responsible Internet Gaming Fee” means the total fee that is required by the Actand this subchapter to be paid annually to the Department of Human Services for compulsivegambling treatment programs in the State.(b) No application for the issuance or retention of a casino license or an Internet gaming permitshall be accepted for filing by the Division unless a nonrefundable deposit of $100,000 shall first havebeen paid in full for each application. [Such] For a casino license, such deposit shall be applied to the
  15. 15. 15initial license fee or retention fee [if the application is approved]. For the issuance or renewal of anInternet gaming permit, such deposit shall be applied to the initial permit fee or renewal fee.(c) No casino license shall be issued unless the applicant shall first have paid in full an issuancefee of not less than $200,000. No initial Internet gaming permit shall be issued unless the applicantshall first have paid in full a permit fee of not less than $400,000 and a Responsible InternetGaming Fee of $250,000. No Internet gaming permit shall be renewed unless the permit holdershall first have paid a renewal fee of not less than $250,000 and an annual Responsible InternetGaming Fee of $250,000. The Responsible Internet Gaming Fee shall be deposited into the StateGeneral Fund pursuant to the Act.(d) [As a component of its initial license fee and as a condition of casino licensure, each] Eachapplicant, [or] licensee, or permit holder shall be required to pay for the efforts of the Division and theCommission on matters directly related to the applicant , [or] licensee, or permit holder at hourly ratesto be set by the Division in accordance with this subsection, and to reimburse any unusual costs or [outof pocket] out-of-pocket expenses incurred by the Division or the Commission in regard to suchmatters.1. Prior to the start of each fiscal year, the Division shall determine the hourly fee rates to bepaid by licensees, [and] applicants, and permit holders pursuant to this subchapter. These rates shall bebased upon the hourly costs of services provided by Division professional staff and the Commissionprofessional staff during the fiscal year, as estimated from the projected fiscal year budget for theDivision and the Commission.2. – 3. (No change.)(e) (No change.)
  16. 16. 1613:69A-9.8 Casino service industry enterprise license fee(a) In accordance with [Subsections] subsections 92a and b of the Act, all casino service industryenterprises offering goods and services [which] that directly relate to casino, simulcast wagering, [or]gaming activity, or Internet gaming activity, including gaming equipment manufacturers, suppliers,and repairers, independent testing laboratories, junket enterprises, and junket representatives and anyperson employed by a junket enterprise or junket representative in a managerial or supervisory position,shall meet the standards established for casino key employees in order to be licensed. Such a licenseshall be issued with subsequent resubmissions not later than every five years thereafter. In addition, inaccordance with [Subsection] subsection 92c(2) of the Act, and at the direction of the Director, allcasino service industry enterprise applicants or licensees required to hold a casino hotel alcoholicbeverage license shall meet the standards established for casino key employees.(b) In order to recover the cost of the investigation and consideration of license applications byenterprises engaged in these industries, other than enterprises engaged in Internet gaming activity,the initial license application and issuance fee for a casino service industry enterprise license, with theexception of an applicant or licensee of a casino hotel alcoholic beverage license, shall be assessed asfollows:1. - 5. (No change.)(c) Companies providing services to casino licensees regarding Internet gaming shall beresponsible for the full cost of their licensure, including any investigative costs, at the hourly rateset by the Division pursuant to N.J.A.C. 13:69A-9.4(d).[(c)] (d) In order to recover costs for monitoring compliance with the Act and the rules of the Divisionand for assuring the continued fitness of enterprises engaged in casino service industries, the fee for the
  17. 17. 17retention of a casino service industry enterprise license, other than enterprises engaged in Internetgaming activity, shall be assessed in accordance with (b) above.[(d)] (e) Any enterprise required to apply for the issuance or retention of a casino service industryenterprise license, other than enterprises engaged in Internet gaming activity, may request aninstallment plan for payment of the application fee. The Division shall propose a payment plan for theapplicant, which shall include, if the applicant chooses to accept the payment plan, an additional fee of$100.00 for the cost of processing the payment plan.CHAPTER 69CCASINO LICENSEESSUBCHAPTER 10. REQUIREMENTS FOR DOING BUSINESS WITH VENDORS13:69C-10.2 Maintaining agreements; filing of agreements(a) - (b) (No change.)(c) A written agreement between a casino licensee holding an Internet gaming permit and acasino service industry enterprise licensed pursuant to section 92a of the Act, or an eligibleapplicant for such a license, in connection with the conduct of Internet gaming that provides for apercentage of the casino licensee’s Internet gaming gross revenue to be paid to the casino serviceindustry enterprise licensee shall be filed with and approved by the Division.CHAPTER 69DGAMING OPERATION ACCOUNTING CONTROLS AND STANDARDSSUBCHAPTER 1. GENERAL PROVISIONS13:69D-1.6 Standard financial and statistical reports
  18. 18. 18(a)-(d) (No change.)(e) Each report to the Division shall be electronically filed not later than the required filing date, unlessspecific approval for an extension is granted to the licensee by the Division. Requests for a filingextension must be submitted to and approved by the Division in writing prior to the required filing date.Any filing date that falls on a Saturday, Sunday, or Federal or State holiday shall be extended until thenext business day.1. Monthly gross revenue reports and Internet gaming gross revenue tax returns shall be duenot later than 9:00 A.M. on the 10th calendar day following the end of the month.2. – 4. (No change.)(f)–(i) (No change.)13:69D–1.11 Casino licensee’s organization(a) (No change.)(b) In addition to satisfying the requirements of (a) above, each casino licensees system of internalcontrols shall include, at a minimum, the following departments and supervisory positions. Each of thedepartments and supervisors required or authorized by this section (a “mandatory” department orsupervisor) shall cooperate with, yet perform independently of, all other mandatory departments andsupervisors of the casino licensee. Mandatory departments and supervisory positions are as follows:1. (No change.)2. An internal audit department, which may perform functions and fulfill responsibilities formultiple but affiliated casino licensees, supervised by a person, who shall be located in New Jersey,referred to in this section as an audit department executive. The audit department executive shall be
  19. 19. 19subject to the reporting requirements specified in (c) below. The internal audit department shall beresponsible for, without limitation, the following:i.–v. (No change.)[vi. If the casino licensee seeks to designate the information technology ("IT") manageras the IT security officer in accordance with the provisions of (b)3 below, the preparation of a writtenreport, updated annually thereafter, which report shall be attested to by the audit department executiveand address the following:(1) A review and appraisal of any risks that may arise as a result of thedecision to consolidate the responsibilities of an IT department manager and IT security officer into oneposition; and(2) An evaluation of the internal controls designed to mitigate such risks withregard to any activity authorized to be performed by or through the use of a casino computer system,including but not limited to, an electronic transfer credit system or gaming voucher system;3. An IT department, which may perform functions and fulfill responsibilities for multiple butaffiliated casino licensees, supervised by a person, who shall be located in New Jersey, referred to in thissection as an IT department manager. If the casino licensee maintains software and data, or any portionthereof, in a remote computer located outside the casino hotel facility in accordance with the provisionsof N.J.A.C. 13:69D-2.2, or utilizes a gaming voucher system to redeem coupons, the responsibilities asto such software and data or gaming voucher system shall be performed by an security officer The ITsecurity officer shall report directly to the IT department manager, be licensed as a casino key employeeand who, prior to delegating any security responsibilities, shall determine, to the greatest extentpracticable, that such delegation would maintain the segregation of incompatible functions and the
  20. 20. 20security and integrity of the casino computer system. The IT department manager may be designated asthe IT security officer, subject to compliance with (b)2vi above.]vi. A quarterly review of information technology (IT) data security of the gamingsystems if the casino offers Internet or mobile gaming;3. An IT department comprised of at a minimum an IT department manager, IT securityofficer, and, if the licensee offers Internet and mobile gaming, an Internet and mobile gamesmanager, all of whom shall be located in New Jersey and licensed as a casino key employee.i. The IT department manager shall be responsible for the integrity of all data, as well asthe quality, reliability, and accuracy of all computer systems and software used by the casino licensee inthe conduct of casino and casino simulcasting facility operations, whether such data and software arelocated within or outside the casino hotel facility, including, without limitation, specification ofappropriate computer software, hardware, and procedures for security, physical integrity, audit, andmaintenance of:Recodify existing i. – v. as (1) – (5) (No change in text.)ii. The IT security officer shall report to the IT department manager and beresponsible for:(1) Maintaining access codes and other computer security controls used toinsure appropriately limited access to computer software and data; and(2) Reviewing logs of user access, security incidents, and unusualtransactions; andiii. The Internet and/or mobile gaming manager shall report to the IT departmentmanager and be responsible for ensuring the proper operation and integrity of Internet and/ormobile gaming and reviewing all reports of suspicious behavior;
  21. 21. 214. – 6. (No change.)(c) - (h) (No change.)CHAPTER 69GEXCLUSION OF PERSONSSUBCHAPTER 1. PERSONS REQUIRED TO BE EXCLUDED13:69G-1.1 DefinitionsThe following words and terms, when used in this chapter, shall have the following meanings unless thecontext clearly indicates otherwise...."Cheat" means any person whose act or acts in any jurisdiction would constitute any offenseunder [Sections] sections 95.27, 95.28, 113, 114, and 115 of the Act, if prosecuted under New Jerseylaw."Excluded person" means any person who has been placed upon the list by preliminary or finalorder of the Division and who, pursuant to section 71 of the Act and this chapter, is required to beexcluded or ejected from a casino hotel facility or from participating in Internet gaming."List or exclusion list" means a list of names of persons who, pursuant to [Section] section 71 ofthe Act and the Divisions rules, are required to be excluded or ejected from casino hotel facilities orprohibited from Internet gaming....13:69G-1.2 Maintenance and distribution of list
  22. 22. 22(a) The Division shall maintain a list of persons to be excluded or ejected from a licensed casinoestablishment or prohibited from Internet gaming.(b) – (c) (No change.)13:69G-1.3 Criteria for exclusion(a) The exclusion list may include any person who meets any of the following criteria:1.–2. (No change.)3. Any person who has been convicted of a criminal offense under the laws of any state, or of theUnited States, which is punishable by more than six months of incarceration, or who has been convictedof any crime or offense involving moral turpitude, and whose presence in a licensed casinoestablishment would be inimical to the interest of the State of New Jersey or of licensed gaming therein;[or]4. Any person whose presence in a licensed casino establishment would be inimical to theinterest of the State of New Jersey or licensed gaming therein, including, but not limited to:i. – iv. (No change.)v. Persons subject to an order of the Superior Court of New Jersey excluding suchpersons from all casino hotel facilities[.]; or5. Any person whose participation in licensed Internet gaming would be inimical to theinterest of the State of New Jersey or licensed gaming therein.(b) – (c) (No change.)13:69G-1.5 Procedure for entry of names(a) – (b) (No change.)
  23. 23. 23(c) The Division may, in its discretion, seek to preliminarily place the respondent on the list of excludedpersons.1. – 2. (No change.)3. The preliminary placement of a candidate on the exclusion list pursuant to section 71 of theAct, N.J.A.C. 13:69B-4, and this chapter shall have the effect of requiring the exclusion or ejectment ofthe excluded person from any casino hotel facility and requiring the prohibition of the excludedperson from participation in Internet gaming.(d) (No change.)13:69G-1.7 Duty of casino licensee(a) A casino licensee shall exclude or eject the following persons from its casino hotel facility andprohibit such persons from participation in Internet gaming:1. – 2. (No change.)(b) If an excluded person enters, attempts to enter, or is in a casino hotel facility and is recognized by thecasino licensee, or if an excluded person participates or attempts to participate in Internet gaming,the casino licensee shall immediately notify the Division of such fact.(c) (No change.)SUBCHAPTER 2. SELF-EXCLUSION13:69G-2.1 DefinitionsThe following words and terms, when used in this subchapter, shall have the following meaningsunless the context clearly indicates otherwise.
  24. 24. 24“Internet self-exclusion list” means a list of names of persons who are required to beprohibited from Internet gaming...."Self-exclusion list" means a list of names of persons who, pursuant to this subchapter, havevoluntarily agreed to be excluded from all gaming activities, including Internet gaming, and to beprohibited from collecting any winnings or recovering any losses at or from all licensed casinos andsimulcasting facilities.13:69G-2.2 Request for self-exclusion and Internet self-exclusion(a) Any person may have his or her name placed on the self-exclusion list or Internet self-exclusion listby submitting a request [for self-exclusion] in the form and manner required by this section.(b) (No change.)(c) Any person requesting placement on the Internet self-exclusion list shall submit through hisInternet gaming account or other means approved by the Division, a completed request forInternet self-exclusion as required in (d) below.[(c)] (d) A request for self-exclusion or Internet self-exclusion shall be in a form prescribed by theDivision, which form shall include:1. The following identifying information concerning the person submitting the request [for self-exclusion]:i. – v. (No change.)vi. [A] For self-exclusion, a physical description of the person, including height,weight, gender, hair color, eye color, and any other physical characteristic that may assist in theidentification of the person;
  25. 25. 252. The length of minimum self-exclusion or Internet self-exclusion, as applicable, requested bythe person:i. – iii. (No change.)3. A waiver and release, which shall release and forever discharge the State of New Jersey, theDivision, and its employees and agents, and all casino licensees and their employees and agents fromany liability to the person requesting self-exclusion or Internet self-exclusion, as applicable, and his orher heirs, administrators, executors, and assigns for any harm, monetary or otherwise, which may ariseout of or by reason of any act or omission relating to the request for self-exclusion or Internet self-exclusion, as applicable, or request for removal from the self-exclusion list or Internet self-exclusionlist, including:i.– ii. (No change.)iii. Permitting a self-excluded person to engage in gaming activity in a licensedcasino or simulcasting facility while on the list of self-excluded persons; [and]iv. Permitting an Internet self-excluded person to engage in Internet gamingactivity while on the list of Internet gaming self-excluded persons; and[iv.] v. Disclosure of the information contained in the self-exclusion or Internet self-exclusion request or list, except for a willfully unlawful disclosure of such information;4. For self-exclusion:[4.] i. The signature of the person submitting the request [for self-exclusion] indicatingacknowledgment of the following statement: "I am voluntarily requesting exclusion from all gamingactivities at all New Jersey licensed casinos and simulcasting facilities because I am a problem gambler.I certify that the information that I have provided above is true and accurate, and that I have read andunderstand and agree to the waiver and release included with this request for self-exclusion. I am aware
  26. 26. 26that my signature below authorizes the Division of Gaming Enforcement to direct all New Jersey casinolicensees to restrict my gaming activities in accordance with this request and, unless I have requested tobe excluded for life, until such time as the Division removes my name from the self-exclusion list inresponse to my written request to terminate my voluntary self-exclusion. I am aware and agree thatduring any period of self-exclusion any money or thing of value seized from me, or owed to me by, acasino licensee shall be subject to forfeiture.”;Recodify existing 5. and 6. as ii. – iii. (No change in text.)5. For Internet self-exclusion:i. The Internet gaming system shall provide a link from the patron’s Internetgaming account directly to a Division website where the patron shall complete the form andprovide his or her acknowledgment of the following statement: "I am voluntarily requestingexclusion from all New Jersey Internet gaming because I am a problem Internet gambler. I certifythat the information I have provided is true and accurate, and that I have read and understandand agree to the waiver and release included with this request for Internet self-exclusion. I amaware that my digital signature authorizes the Division of Gaming Enforcement to direct all NewJersey casino licensees to restrict my Internet gaming in accordance with this request and, unless Ihave requested to be excluded for life, until such time as the Division removes my name from theInternet self-exclusion list in response to my request to terminate my voluntary Internet self-exclusion. I am aware and agree that during any period of Internet self-exclusion any money orthing of value seized from me, or owed to me by, a casino licensee shall be subject to forfeiture.”;andii. The Division shall confirm the patron’s request to be placed on the Internetgaming self-exclusion list.
  27. 27. 2713:69G-2.3 Self-exclusion list; Internet self-exclusion list(a) The Division shall maintain the official self-exclusion list and Internet self-exclusion list and shallnotify each casino licensee of any addition to or deletion from the lists by transmitting a notice directlyto each casino licensee.(b) Each casino licensee shall maintain its own copy of [the self-exclusion] each list and shall establishprocedures to ensure that its copy of [the self-exclusion] each list is updated and that all appropriateemployees and agents of the casino licensee are notified of any addition to or deletion from [the] eachlist within five business days after the day the notice is transmitted pursuant to (a) above. The noticeprovided by the Division shall include the name and date of birth of any person whose name shall beremoved from the [self-exclusion] applicable list and the following information concerning any personwhose name shall be added to the [self-exclusion] applicable list:1. – 4. (No change.)5. The Social Security [Number] number, if voluntarily provided by the person requesting self-exclusion or Internet self-exclusion;6. [A] If applicable, a physical description of the person, including height, weight, gender, haircolor, eye color, and any other physical characteristic that may assist in the identification of the person;and7. [A] If applicable, a copy of the photograph taken by the Division pursuant to N.J.A.C.13:69G-2.2(b).(c) (No change.)(d) No casino licensee or employee or agent thereof shall disclose the name of, or any informationabout, any person who has requested self-exclusion or Internet self-exclusion to anyone other than
  28. 28. 28employees and agents of the casino licensee whose duties and functions require access to suchinformation. Notwithstanding the foregoing, a casino licensee may disclose the name of andinformation about a self-excluded or Internet self-excluded person to appropriate employees of othercasino licensees in Atlantic City for the purpose of alerting other casino licensees that a self-excluded orInternet self-excluded person has tried to gamble or obtain gaming related privileges or benefits in thecasino licensees casino or simulcasting facility, or Internet gaming site.13:69G-2.4 Duties of casino licensee(a) [Each] For self-excluded patrons, a casino licensee shall establish procedures that are designed, tothe greatest extent practicable, to:1. – 5. (No change.)(b) For Internet self-excluded patrons, a casino licensee shall establish procedures that aredesigned, to the greatest extent practicable, to:1. Ensure that self-excluded persons do not receive, either from the casino licensee orany agent thereof, junket solicitations, targeted mailings, telemarketing promotions, player clubmaterials, or other promotional materials relating to Internet gaming; and2. Enforce the provisions of N.J.A.C. 13:69G-2.3(d).Recodify existing (b) and (c) as (c) and (d) (No change in text.)13:69G-3.2 Prohibited person; forfeiture of winnings(a) (No change.)(b) Upon verification of a prohibited status, the casino licensee shall:
  29. 29. 291. Remove the prohibited person from the gaming floor or immediately suspend any Internetor mobile gaming activity, as applicable;2. - 3. (No change.)(c) A casino licensee shall prepare a multipart form known as a Payout Receipt and Notice of Forfeiture,which shall include, without limitation, the information in (c)1 through 6 below. The Payout Receiptand Notice of Forfeiture shall be signed and attested to by: the prohibited person, unless the personrefuses to sign or is unknown; the casino employee delivering the winnings or things of value to thecashiers’ cage; and the cashiers’ cage employee who received the winnings or things of value. ForInternet or mobile gaming, a casino licensee shall issue a Payout Receipt and Notice of Forfeitureto the patron via electronic or regular mail.1. – 4. (No change.)5. The location (table type and number, slot machine asset number, keno window, etc.) where theprohibited person was engaged in a gaming transaction or identification of Internet or mobilewagering gaming session; and6. (No change)(d) – (i) (No change.)CHAPTER 69JPERSONS DOING BUSINESS WITH CASINO LICENSEESSUBCHAPTER 1. GENERAL PROVISIONS13:69J-1.1 Definitions(a) The following words and terms, when used in this chapter, shall have the following meaningsunless the context clearly indicates otherwise.
  30. 30. 30"Gaming equipment" means any mechanical, electrical, or electronic contrivance or machineused in connection with gaming or any game and includes, without limitation, roulette wheels, big sixwheels, slot machines, multi-player slot machine systems, slot tokens, prize tokens, cards, dice, chips,plaques, match play coupons, card dealing shoes, drop boxes, and other devices, machines, equipment,items, or articles determined by the Division to be so utilized in gaming as to require licensing of themanufacturers, distributors, or servicers, or as to require Division approval in order to contribute to theintegrity of the gaming industry or to facilitate the operation of the Division. “Gaming equipment”shall also include a computer network of both interstate and intrastate interoperable packetswitched data networks and the hardware, software, or systems associated therewith, used inconnection with Internet gaming or the conduct of any game conducted through the Internet....(b) (No change.)13:69J-1.2 Gaming-related casino service industry enterprise license requirements(a) No enterprise shall provide goods or services directly related to casino, simulcast wagering,[or] gaming activity, or Internet wagering activity to, or otherwise transact business directly related tocasino, simulcast wagering, [or] gaming activity, or Internet wagering activity with, a casino applicantor licensee, its employees or agents unless licensed in accordance with N.J.S.A. 5:12-92a and b.(b) In determining whether an enterprise shall be licensed pursuant to this section, the Divisionshall consider, without limitation, whether the enterprise satisfies one or more of the following criteria:1. Whether the enterprise manufactures, supplies, or distributes devices, machines,equipment, items, or articles [which] that:i. – ii. (No change.)
  31. 31. 31iii. Have the capacity to affect the outcome of the play of an authorized game orsimulcast wagering; [or]iv. Have the capacity to affect the calculation, storage, collection, or control of grossrevenue; orv. Directly relate to Internet gaming activity including the supplying ofsoftware or systems;2. (No change.)3. Whether the enterprise provides services directly related to the operation, regulation, ormanagement of a casino or casino simulcasting facility; [or]4. Whether the enterprise manages, controls or administers Internet games or wagersassociated with such games; or[4.] 5. (No change in text.)(c) Enterprises required to be licensed in accordance with N.J.S.A. 5:12-92a and b and (a) aboveshall include, without limitation, the following:1. (No change.)2. Casino credit reporting services, casino simulcasting hub facilities, and suppliers ofcasino security services; [and]3. Junket enterprises and junket representatives, and any person employed by a junketenterprise or junket representative in a managerial or supervisory position[.]; and4. Companies providing Internet gaming software or systems, vendors who manage,control, or administer games and associated wagers conducted through the Internet, andproviders of customer lists of persons who have placed wagers through the Internet.
  32. 32. 32(d) Junket enterprises, junket representatives, and enterprises providing other servicesincluding, but not limited to, payment processing and related money-transmitting services,customer identity, age verification, and geo-location verification used in the conduct of Internetand mobile gaming, regardless of any such enterprise’s contractual relationship with an Internetgaming permit holder, shall be licensed as an ancillary casino service industry enterprise.(e) Enterprises providing other services including, but not limited to, telecommunications that arenot specifically designed for Internet gaming and patron interaction shall register as a vendor withthe Division.(f) The Division may require any entity vendor registered pursuant to (e) above to apply foreither a casino service industry enterprise license or an ancillary casino service industry enterpriselicense, if such application for either is deemed to be consistent with the public interest andpolicies of the Act. The Division, in its discretion, may also require any ancillary casino serviceindustry enterprise licensee, including those licensed under (d) above, to be licensed as a casinoservice industry enterprise.CHAPTER 69LTAXESSUBCHAPTER 1. GROSS REVENUE TAX; INTERNET GAMING GROSS REVENUE TAX13:69L-1.1 Description of taxes(a) Subsection 144a of the Act imposes an annual tax on gross revenue, as defined in section 24 ofthe Act, in the amount of eight percent of such gross revenues.(b) Section 95.19 of the Act imposes an annual tax on gross revenue from Internet gaming, asdefined in section 28.2 of the Act, in the amount of 15 percent of such gross revenues.
  33. 33. 3313:69L-1.2 DefinitionsThe following words and terms, when used in this subchapter, shall have the following meaningsunless the context clearly indicates otherwise.[“2008 agreement” means the agreement dated August 13, 2008, between the New Jersey Sportsand Exposition Authority and the Casino Association of New Jersey and other relevant parties for thebenefit of the horse racing industry.“Agreement costs" means amounts actually paid by the participating casino operators pursuant tothe terms of the 2008 agreement ("payments") together with interest to the extent that payments exceedthe tax value of eligible promotional gaming credits during the recoupment period. Interest shall becalculated based on the "prime rate" on the first business day of each calendar month as identified in theH.15 Statistical Release issued by the Federal Reserve Board, plus two percent.]..."Casino operator" means:1. Where there is no casino management agreement with regard to the casino hotelfacility, the casino operator shall be the casino licensee [which] that is responsible for submitting andmaintaining the internal controls required by section 99 of the Act; [or]2. Where there is a casino management agreement with regard to the casino hotel facility,the casino operator shall be the casino management licensee, if said licensee has supplied capital at riskin the gaming operations of the casino. If the casino management licensee has supplied none of thecapital at risk in the gaming operations of the casino, the casino operator shall be the licensee designatedin paragraph 1 of this definition, as though no casino management agreement existed[.]; or
  34. 34. 343. For the purpose of Internet gaming gross revenue tax, an “Internet gamingaffiliate” as defined in the Act shall be considered a casino operator."Casino Revenue Fund" means a separate special account established in the Department of theTreasury for deposit of all revenue from the tax imposed by subsection 144a of the Act, the taximposed by section 95.19 of the Act, the investment alternative taxes imposed by subsections 144e and144.1a of the Act, any interest earned pursuant to paragraph 2 of subsection 144.1a or section 145.1 ofthe Act and any penalties payable to the Casino Revenue Fund pursuant to section 145 of the Act.[“Deduction threshold” means the value of promotional gaming credits that must be wagered inthe casinos of all casino operators during a calendar year before any casino operator is entitled to take adeduction from gross revenue for promotional gaming credits during that year. The deduction thresholdshall be $90 million for each calendar year.]...“Eligible promotional gaming credit” means any promotional gaming credit that is wagered inthe casino or through an authorized Internet gaming system of a casino operator during a calendaryear in excess of [the deduction threshold and therefore available as a deduction from gross revenue]$90 million, which is to be prorated over the calendar year at a rate of $7.5 million per month....[“Participating casino operator” means a casino operator that is a signatory participant/obligor tothe 2008 agreement.“Participating casino operator sharing percentage” means payments made pursuant to the 2008agreement by a particular participating casino operator compared pro rata to the payments madepursuant to the 2008 agreement by all participating casino operators, expressed as a percentage. Forexample, if a particular participating casino operator has made payments of $6 million pursuant to the
  35. 35. 352008 agreement, and all participating casino operators have collectively made payments of $60 millionpursuant to the 2008 agreement, the participating casino operator sharing percentage of that particularparticipating casino operator would be 10 percent.]“Promotional gaming credit” means a slot machine credit or other item approved by the Divisionthat is issued by a casino operator to a patron for the purpose of enabling the placement of a wager at aslot machine in its casino or through an authorized Internet gaming system. The slot machine creditor other item shall be non-cashable unless an alternative form of slot machine credit has been approvedby the Division. No such credit shall be reported as a promotional gaming credit by a casino operatorunless the casino operator can establish that the credit was:1. - 2. (No change.)...[“Recoupment period” means the period commencing on August 14, 2008, and ending on thedate that the tax value of eligible promotional gaming credits deducted by participating casino operatorsequals the agreement costs.“Tax value of eligible promotional gaming credits” means each dollar of deductions for eligiblepromotional gaming credits shall be valued at an amount equal to the tax rate on gross revenue set forthin N.J.S.A. 5:12-144a to be applied against each dollar of the agreement costs. For example, if theeligible promotional gaming credits in a tax year equal $100 million, and the tax on gross revenue equals8 percent, the tax value of the eligible promotional gaming credits would be $8 million for that tax year.]13:69L-1.3 Tax year[For purposes of the tax on gross revenue, the] The tax year shall be the calendar year. In theyear in which a casino operator commences gaming operations, the tax year for that casino operator
  36. 36. 36shall begin with the commencement of operations and terminate on the last gaming day of the currentcalendar year.13:69L-1.4 Tax payer(a) The obligation to file returns and reports and to pay the gross revenue tax, the Internet gaminggross revenue tax, and any investment alternative taxes shall be upon the casino operator who shall beprimarily liable [therefore] therefor. In the event of a transfer of operations to a different casinooperator, the transferor-operator will be obligated to file a return and to pay all taxes based upon [gross]the revenues derived by the said transferor during the tax year in which the transfer occurred. Theappointment of a conservator under the Act shall not be deemed a transfer to a different casino operatorbut, for the duration of the conservatorship, the conservator shall file all returns and pay all taxes onbehalf of the former or suspended casino licensee who shall remain primarily liable therefor.(b) – (d) (No change.)13:69L-1.5 Payment of taxes(a) (No change.)(b) The annual nature of the gross revenue tax notwithstanding, the casino operator shall makeweekly deposits of the tax at such times, under such conditions, and in such depositories as shall beprescribed by the Division of Taxation pursuant to subsection 145b of the Act, provided that deposits fora given week shall be made no later than the Monday of the succeeding week. If such Monday is a legalholiday, the deposit shall be made on the next business day. In the event that the week for which theweekly deposit is being made includes gaming days from two calendar months, the casino operator shalldeposit and report separately, the amount of the deposit attributable to the gaming days of each month.
  37. 37. 37The deposits shall be deposited to the credit of the Casino Revenue Fund. The amount of gross revenueupon which the weekly tax payment is based shall be filed with the Division concurrently with thepayment to the State Treasurer.(c) The amount of the required gross revenue tax weekly deposit for a given week shall bedetermined by subtracting the total amount of deposits made by the casino operator in the current taxyear up to and including the week preceding the given week from the total tax liability incurred by thecasino operator for the current tax year. The total tax liability for the current tax year shall be basedupon the gross revenue derived by the casino operator from the commencement of the current tax year tothe end of the gaming day which commenced on the Friday of the given week. Any casino operator thatestimates slot machine drop pursuant to N.J.A.C. 13:69L-1.7(c) shall include a weekly slot machinedrop estimate, calculated in accordance with methodology approved pursuant to that subsection, in eachweekly tax deposit required by this section.(d) The amount of gross revenue tax deposits required for a given month shall be the amountdetermined by subtracting the total amount of deposits made by the casino operator in the current taxyear up to and including the month preceding the given month from the total tax liability incurred by thecasino operator for the current tax year. The total tax liability for the current tax year shall be basedupon the gross revenue derived by the casino operator from the commencement of the tax year to theend of the gaming day which commenced on the last calendar day of the given month.(e) In the event that the total amount of gross revenue tax deposits made for the entire tax year isdetermined to be less than the annual tax liability for the entire year, the casino operator shall remit therequisite additional payment to the Division of Taxation. In the event that the total amount of suchdeposits is determined to be greater than the annual gross revenue tax liability, the casino operator mayreduce the amount of its weekly deposits in the succeeding tax year by the amount of the overpayment,
  38. 38. 38provided, however, that the casino operator shall not claim any such credit against deposits unless theDivision of Taxation first certifies the existence and amount of the overpayment. Nothing in this sectionshall limit any authority of the Division of Taxation under sections 149 and 150 of the Act and the "StateTax Uniform Procedure Law," Section 9 of Title 54 of the Revised Statutes, including the authority todetermine the insufficiency of any gross revenue tax deposit or deposits, to require payments ofpenalties and interest or to allow or disallow any claim for refund due to overpayment of taxes.(f) The Internet gaming gross revenue tax for each month shall be due and payable monthlyon or before the 10th calendar day of the next month in such depository as shall be prescribed bythe Division except that if the 10th calendar day is Saturday, Sunday, or legal holiday, the duedate shall be advanced to the next regular business day.(g) Nothing in this section shall limit the authority of the Division under the "State TaxUniform Procedure Law," Section 9 of Title 54 of the Revised Statutes, to require payments ofpenalties and interest on the insufficiency of any Internet gaming gross revenue tax deposit or toallow or disallow any claim for refund due to an overpayment of such taxes. Interest shall becalculated from the date the tax was originally due through the actual date of payment provided,however, that if the deficiency is paid within 10 business days from the date of the Division’s taxdeficiency notice, interest shall be calculated through the date of such notice.13:69L-1.6 Computation of taxes(a) The gross revenue tax shall be eight percent of gross revenue. The gross revenue for the taxyear, or portion thereof, shall be the amount obtained from the following calculation: the total of allsums for the tax year, or portion thereof, that are actually received by a casino operator from its gamingoperations, which sums include, but are not limited to, cash, slot tokens, prize tokens counted at face
  39. 39. 39value pursuant to N.J.A.C. 13:69D-1.41 [and 1.43], the value of electronic credits withdrawn frompatron accounts pursuant to N.J.A.C. 13:69D-1.37[A], checks received by a casino operator pursuant toN.J.S.A. 5:12-101, whether collected or not, gaming vouchers and coupons counted pursuant to N.J.A.C.13:69D-1.33 and documents evidencing credit and debit card chip transactions processed pursuant toN.J.A.C. 13:69D-1.18A regardless of validity, less only the total of all sums paid out as winnings topatrons.(b) Nothing in this section shall be construed to limit the authority of the Division of Taxation to re-determine the amount of gross revenue tax liability or to require adjustments or corrections to theaccounts of the casino operator.(c) (No change.)(d) For purposes of calculating the tax on gross revenue pursuant to (a) above, a casino operatorshall be entitled to a deduction from gross revenue for the value of eligible promotional gaming credits[:1. Allocable to the casino operator in accordance with the provisions of N.J.A.C. 13:69L-1.11(a) or (d); or2. Wagered in the casino of] allocable to the casino operator in accordance with [theprovisions of] N.J.A.C. 13:69L-1.11[(e)].(e) The Internet gaming gross revenue tax shall be 15 percent. The Internet gaming grossrevenue for the tax year, or portion thereof, shall be the amount obtained from the total of allsums received by a casino licensee from Internet gaming operations, less only the total of all sumsactually paid out as winnings to patrons.(f) Nothing in this section shall be construed to limit the authority of the Division to re-determine the amount of Internet gaming gross revenue tax liability or to require adjustments orcorrections to the accounts of the casino operator.
  40. 40. 4013:69L-1.7 Return and reports(a) The casino operator shall file with [the Division and] the Division of Taxation an annual taxreturn for purposes of the gross revenue tax. The return shall be filed no later than March 15 followingthe tax year. Filing of the annual tax return shall satisfy the reporting of gross revenue requirementimposed by subsection 148a of the Act. The annual tax return shall be made on a form promulgated anddistributed by the Division of Taxation pursuant to section 151 of the Act.(b) (No change.)(c) For purposes of the monthly gross revenue reports required in (b)1 above and the monthly grossrevenue tax return required in (b)2 above, the casino operator may estimate slot machine drop providedthat:1. Such estimates are calculated through an approved system of reading and recording slotmachine meters pursuant to N.J.A.C. 13:69D-1.42[(o)](s);2. - 4. (No change.)(d) The casino operator shall file with the Division a summary report of the Internet grossgaming revenue for each weekly period of Saturday through Friday no later than the Monday ofthe succeeding week. If such Monday is a legal holiday, the summary report shall be made on thenext business day. In the event that the weekly period includes gaming days from two calendarmonths, the casino operator shall report separately the amount of revenue attributable to thegaming days of each month.(e) On or before the 10th calendar day of each month, the casino operator shall file a monthlyInternet gaming gross revenue tax return with the Division which shall reflect the amount of grossrevenue derived during the preceding month and the associated tax paid.
  41. 41. 4113:69L-1.8 Examination of accounts and records(a) The Division may perform audits of the books and records of a casino licensee, at such times andintervals as it deems appropriate, in order to certify gross revenue and Internet gaming gross revenue.(b) The casino operator shall permit duly authorized representatives of the Division to examine theoperators accounts and records for the purpose of certifying gross revenue and Internet gaming grossrevenue. In the event that any records or documents deemed pertinent by a Division examiner are in thepossession of another licensee or entity, the casino operator shall be responsible for making thoserecords or documents available to the examiner. Further, the casino operator shall be individually andseverally liable for any relevant accounts, records or documents maintained or required to be maintainedby any other licensee or entity with regard to the casino.(c) (No change.)(d) The Division shall notify the casino operator of any gross revenue or Internet gaming grossrevenue tax deficiencies disclosed during the gross revenue certification process.13:69L-1.11 Deduction for promotional gaming credits[(a) During the recoupment period, a participating casino operator shall be entitled to a deductionfrom gross revenue equal to its participating casino operator sharing percentage times:1. Until the tax value of eligible promotional gaming credits deducted by participatingcasino operators equals the amount paid in accordance with the 2008 agreement, the value of theeligible promotional gaming credits wagered in the casinos of all casino operators during the tax year orportion thereof; and2. For the remainder of the recoupment period, the value of the eligible promotional gamingcredits wagered in the casinos of all participating casino operators during the tax year or portion thereof,
  42. 42. 42in addition to any deduction to which a participating casino operator may be entitled pursuant to (d)below.(b) A participating casino operator which ceases gaming operations prior to the full recovery of itspro rata share of the costs of the 2008 agreement shall:1. Continue to have the right to such allocation of eligible promotional gaming credits andthe right to deduct the value of same from gross revenue; and2. Have the right, subject to Division approval, to transfer and assign such rights to anothercasino operator, which shall thereafter have the right to deduct the value of the eligible promotionalgaming credits from its gross revenue as if it were the participating casino operator entitled to theallocation of the eligible promotional gaming credits pursuant to (a) above.(c) Based upon the information reported pursuant to (f) below, the Division shall, on or before theseventh calendar day after month-end, advise all casino operators when the tax value of eligiblepromotional gaming credits deducted by participating casino operators equals:1. Amounts paid in accordance with the 2008 agreement, thereby signifying that casinooperators may be eligible to take a deduction from gross revenue for promotional gaming credits inaccordance with (d) below; and2. The agreement costs, thereby signifying the end of the recoupment period.(d) After the tax value of eligible promotional gaming credits deducted by participating casinooperators equals amounts paid in accordance with the 2008 agreement and until the end of therecoupment period, in any tax year or portion thereof in which eligible promotional gaming credits arewagered in the casinos of non-participating casino operators, each casino operator shall be entitled to adeduction from gross revenue in an amount equal to its proportionate share, as defined in N.J.A.C.13:69L-1.2, times the value of the eligible promotional gaming credits wagered in the casinos of non-
  43. 43. 43participating casino operators. This deduction shall be in addition to any deduction to which aparticipating casino operator is entitled pursuant to (a)2 above.][(e)] (a) [After the completion of the recoupment period, in any tax year or portion thereof in whichthere are eligible promotional gaming credits, a] A casino operator shall be entitled to a deduction fromgross revenue in an amount equal to its proportionate share of the eligible promotional gaming creditswagered in the casinos of all casino operators or through the licensee’s Internet gaming systemduring the tax year [or portion thereof].[(f)] (b) On or before the third calendar day of each month, each casino operator shall report to theDivision the value of the promotional gaming credits that were wagered in its casino or through thelicensee’s Internet gaming system during the preceding month. [In addition, until all payments aremade pursuant to the 2008 agreement, each participating casino operator shall report any payments thatit made pursuant to the 2008 agreement during the preceding month.] Upon timely receipt of thisinformation, the Division shall, on or before the seventh calendar day after month-end, make available toall casino operators the industry promotional gaming credit information, including the value ofpromotional gaming credits wagered and the value of eligible promotional gaming credits allocable toeach casino operator for deduction from gross revenue.[(g)] (c) In [each tax year or portion thereof during the recoupment period, and in] accordance with theinformation provided by the Division pursuant to [(f)] (b) above, each [participating] casino operatorshall be entitled, in its monthly gross revenue report and monthly gross revenue tax return, to deductfrom its gross revenue the value of eligible promotional gaming credits allocated by the Division to such[participating] casino operator.[(h) In each tax year or portion thereof after the tax value of eligible promotional gaming creditsdeducted by participating casino operators equals $90 million, and in accordance with the information
  44. 44. 44provided by the Division pursuant to (f) above, each casino operator shall be entitled, in its monthlygross revenue report and monthly gross revenue tax return, to deduct from its gross revenue itsproportionate share, as defined by N.J.A.C. 13:69L-1.2, times the value of the eligible promotionalgaming credits wagered in the casinos of non-participating casino operators. This deduction shall be inaddition to any deduction to which a participating casino operator is entitled pursuant to (g) above.(i) In each tax year or portion thereof after the completion of the recoupment period, and inaccordance with the information provided by the Division pursuant to (f) above, each casino operatorshall be entitled, in its monthly gross revenue report and monthly gross revenue tax return, to deductfrom its gross revenue its proportionate share of the value of the eligible promotional gaming creditswagered in the casinos of all casino operators.][(j)] (d) (No change in text.)[(k) Notwithstanding any other provision of this section to the contrary, the Division may reduce thevalue of the available deduction for promotional gaming credits if it determines that such a limitation isnecessary to eliminate a negative fiscal impact on the Casino Revenue Fund attributable solely to thededuction and not to other economic or other factors that cause a negative fiscal impact to the CasinoRevenue Fund. In accordance with the provisions of N.J.S.A. 5:12-144.2d(2), a negative fiscal impactshall be deemed to have occurred only if the value of promotional gaming credits wagered by patrons inall casinos during any tax year falls below $90 million.]CHAPTER 69OINTERNET AND MOBILE GAMINGSUBCHAPTER 1. GENERAL PROVISIONS13:69O-1.1 Definitions
  45. 45. 45The following words and terms, when used in this chapter, shall have the following meaningsunless the context clearly indicates otherwise:“Authentication process” means a method used by a system to verify the validity ofsoftware. Such method requires the calculation of an output digest, which is compared to a secureembedded value. The output digest shall be of 128-bit complexity, at a minimum. Software shallbe deemed to have been authenticated if the calculated digest equals the secure embedded value.“Authorized Internet or mobile game” means any game authorized by the Division for usewith an Internet or mobile gaming system.“Client terminal” means any device that is used to interact with a gaming system for thepurpose of conducting server-based gaming activity.“Dormant account” means an Internet gaming account, which has had no patron activityfor a period of one year.“Game server” means the server that contains game software and control programs.“Gaming session” means the period of time commencing when a patron activates aparticular game by placing a wager and terminating when a patron concludes playing that game.“Gaming system” means either a server-based gaming system, an Internet gaming system,a mobile gaming system, or table game simulcasting system.“Internet gaming" means the placing of wagers through a server-based gaming systemwith a casino licensee at a casino located in Atlantic City using a computer network of bothFederal and non-Federal interoperable packet switched data networks through which the casinolicensee may offer authorized Internet games to a patron who has established an Internet gamingaccount with the casino licensee.
  46. 46. 46“Internet gaming account” means an account established by a casino licensee that a patronshall use for the deposit and withdrawal of funds used for Internet wagering.“Internet gaming manager” means a person licensed as a casino key employee responsiblefor the operations of internet gaming.“Internet gaming operator” means a party or parties permitted by the Division to operatean Internet gaming system.“Internet gaming system” means all hardware, software, and communications thatcomprise a system for the purpose of offering authorized Internet games.“Mobile gaming” means the placing of wagers with a casino licensee through a server-based gaming system at a casino located in Atlantic City using a computer network through whichthe casino licensee may offer authorized games to individuals who have established a wageringaccount with the casino licensee and who are physically present within the property boundaries ofan approved hotel facility.“Mobile gaming account” means an account established by a casino licensee that a patronmay use for the deposit and withdrawal of funds used for mobile wagering.“Mobile gaming operator” or “mobile operator” means a party or parties licensed by theDivision to operate a mobile gaming system.“Mobile gaming system” means all hardware, software, and communications that comprisea system for the purpose of offering electronic versions of authorized casino games to be played onclient terminals within the property boundaries of an approved casino facility.“Patron session” means a period of time when a patron is logged on to an Internet ormobile gaming system.
  47. 47. 47“Peer-to-peer gaming” means all gaming activity, such as poker, where patrons arecompeting against each other.“Primary gaming equipment” means all hardware, software, and other technology orequipment of any kind determined by the Division to be necessary for the conduct of anauthorized Internet game on the premises of a casino hotel within the territorial limits of AtlanticCity.“Secure transaction file” means a file that contains data, which is unalterable or cannot bemodified without detection.“Server-based gaming” means all gaming activity conducted via a client terminal where theoutcome of a game is determined by a random number generator (RNG) maintained on a serveror a dealer-verified outcome from a simulcast table game.“Server-based gaming system” means all hardware, software, and communications thatcomprise a system utilized for the purpose of offering electronic versions of authorized casinogames where material aspects of game functionality occur at the server level.“Table game simulcasting system” means all hardware, software, and communications thatcomprise a system used to simulcast table games.13:69O-1.2 General requirements for Internet and mobile gaming(a) Internet or mobile gaming shall only be engaged in by patrons who have established anInternet or mobile gaming account.(b) The message “If you or someone you know has a gambling problem and wants help, call 1-800-Gambler” shall be displayed prominently within the log on and log off screens on the Internetor mobile gaming system.
  48. 48. 48(c) When a patron logs on to an Internet or mobile gaming system, the system shall display thedate and time of the patron’s previous log on.(d) If a patron has suspended his or her account for a period of at least 72 hours, a casinolicensee shall not send gaming–related electronic mail to such patron while the account issuspended.(e) The Internet or mobile gaming system shall employ a mechanism to detect the physical locationof a patron logging into the gaming system and every hour thereafter. If the system detects thatthe physical location of the patron is in an area unauthorized for Internet or mobile gaming, thesystem shall not accept wagers and disable the patron’s account until such time that the patron isin an authorized location as follows:1. Mobile gaming shall only occur within the property boundaries of an approved casinohotel facility. For purposes of this chapter, the approved casino hotel facility shall include anyarea located within the property boundaries of the casino hotel facility, including any recreationarea or swimming pool, where mobile gaming devices may be used by patrons, but excludingparking garages or parking areas. A mobile gaming system shall disable all gaming activity on aclient terminal whenever it is removed from the property boundaries; and2. Internet gaming shall only occur within the State of New Jersey, unless otherwiseauthorized by a reciprocal agreement.(f) A client terminal used for Internet or mobile gaming shall not contain patron accountinformation or game logic that determines the outcome of any game.(g) Client terminal software used for Internet or mobile gaming shall not contain unauthorizeddata collection, file extraction, malware, or any other feature that compromises the integrity of theclient terminal or the data contained therein.
  49. 49. 49(h) Software downloaded onto a client terminal shall cause the client terminal to:1. Notify the patron whenever:i. The patron has been logged off due to a period of inactivity; andii. The client terminal is not communicating with the Internet or mobile gamingsystem; and2. Continuously display the current time in the time zone where the client terminal isphysically located and the time elapsed while in the current patron session.(i) A casino licensee offering Internet wagering shall have an Internet gaming managerresponsible for the operation and integrity of Internet gaming and reviewing all reports ofsuspicious behavior. A casino licensee offering mobile wagering shall have a mobile gamingmanager responsible for ensuring the operation and integrity of mobile gaming and reviewing allreports of suspicious behavior. The Internet or mobile gaming manager shall be a key employee,however nothing shall preclude a casino licensee from having one key employee perform thefunctions of both the Internet and mobile gaming managers. The Internet and mobile gamingmanager(s) shall immediately notify the Division upon detecting any person participating inInternet or mobile wagering who is:1. Engaging in or attempting to engage in, or who is reasonably suspected of cheating,theft, embezzlement, collusion, money laundering, or any other illegal activities, including thoseactivities prohibited in Article 9 of the Act;2. Required to be excluded pursuant to N.J.S.A. 5:12-71, 5:12-71.2, or any person who isprohibited from entering a casino or a casino simulcasting facility pursuant to N.J.S.A. 5:12-119(a); or3. Prohibited by the casino licensee from Internet wagering.
  50. 50. 50(j) A licensee shall file with the Division, internal controls for all aspects of Internet and mobilegaming operations prior to implementation and any time a change is made thereafter. Theinternal controls shall include detailed procedures for system security, operations, accounting, andreporting of problem gamblers.(k) A casino licensee offering Internet or mobile gaming shall describe in its internal controls themethod for securely issuing, modifying, and resetting a patron’s account password, PersonalIdentification Number (PIN), or other approved security feature, where applicable. Such methodshall include at a minimum:1. Proof of identification, if in person; or2. The correct response to two or more challenge questions; and3. Notification to the patron following any modification via electronic or regular mail orother method approved by the Division.(l) All terms and conditions for Internet or mobile gaming shall be included as an appendix to theinternal controls of the licensee addressing all aspects of the operation, including the following:1. Name of the party or parties with whom the patron is entering into a contractualrelationship, including any licensee;2. Patron’s consent to have the licensee confirm the patron’s age and identity;3. Rules and obligations applicable to the patron other than rules of the game including,but not limited to:i.Prohibition from allowing any other person to access or use his or her Internet ormobile gaming account;ii.Prohibition from engaging in Internet or mobile wagering activity, unless they arephysically present in New Jersey.
  51. 51. 51iii.Consent to the monitoring and recording by the operator and/or the Division of anywagering communications and geographic location information; andiv. Consent to the jurisdiction of the State of New Jersey to resolve any disputes arisingout of Internet or mobile gaming.4. Full explanation of all fees and charges imposed upon a patron related to gamingtransactions;5. Availability of account statements detailing patron account activity;6. Privacy policies, including information access;7. Legal age policy, including a statement that it is a criminal offense to allow a personwho is under the age of 21 to participate in Internet or mobile wagering;8. Treatment of inactive or dormant account fund balances;9. Patron’s right to set daily limits and to self-exclude;10. Patron’s right to suspend his or her account for a period of time as chosen by thepatron;11. Actions that will be taken in the event a patron becomes disconnected from the Internetor mobile gaming system during game play;12. Notice that a malfunction voids all pays;13. Estimated time period for withdrawal of funds from Internet or mobile account; and14. Information to be displayed on a patron protection page. The patron protection pageshall be accessible to a patron during a patron session. The patron protection page shall contain,at a minimum, the following:i. A prominent message, which states “If you or someone you know has agambling problem and wants help, call 1-800-Gambler”;
  52. 52. 52ii. A direct link to at least one domestic organization dedicated to helpingpeople with potential gambling problems;iii. Rules governing daily limits;iv. Method for changing or retrieving a password, PIN, or other approvedaccess security feature;v. Method for filing a complaint with the licensee;vi. Method for filing a complaint with the Division, which shall include theDivision’s complaint e-mail address and telephone number for the complaint hotline;vii. Method for obtaining a copy of the terms and conditions agreed to whenestablishing an Internet or mobile gaming account;viii. Method for the patron to obtain account and game history from the licensee;ix. Notification that underage gambling is a criminal offense and that anyonewho facilitates someone under the age of 21 to gamble has committed a criminal offense and shallbe prohibited from Internet gaming;x. Notification that the patron is responsible to configure his client terminal’sauto-lock feature to protect the client terminal from unauthorized use;xi. Notification that a patron is prohibited from allowing any other person toaccess or use his or her Internet or mobile gaming account; andxii. Notification of Federal prohibitions and restrictions regarding Internetgaming, specifically, any limitations upon Internet gaming as set forth in 18 U.S.C. §§ 1084 et seq.(The Wire Act) and 31 U.S.C. §§ 3163 through 3167 (UIEGA). The notice shall explicitly statethat it is a Federal offense for persons physically located outside of New Jersey to engage inInternet wagering through a New Jersey casino, unless explicitly authorized by the Division.
  53. 53. 53(m) Whenever the terms and conditions that apply to Internet or mobile gaming are changed, thelicensee shall require a patron to acknowledge acceptance of such change. Unless otherwiseauthorized by the Division, the patron’s acknowledgement shall be date and time stamped by theInternet or mobile gaming system, as applicable.(n) A casino operator’s primary equipment used to conduct Internet or mobile gaming shall belocated, with the prior approval of the Division, in a restricted area on the premises of the casinohotel within the territorial limits of Atlantic City, New Jersey. Subject to Division approval, acasino operator may use backup equipment located outside the territorial limits of Atlantic City toconduct Internet gaming for a time period not to exceed 60 days unless otherwise authorized bythe Division.(o) Internet or mobile gaming systems shall be capable of disabling and re-enabling thefollowing on demand:1. Gaming sessions;2. Individual games; and3. Individual patron sessions.(p) A casino licensee offering Internet or mobile gaming shall comply with all Federalrequirements including, but not limited to, suspicious activity reporting and W2-G reporting.(q) Each casino licensee offering Internet gaming shall perform a network integrity andsecurity assessment conducted by an independent network professional selected by the licensee’sexternal auditor. The independent network professional’s report on the assessment shall besubmitted to the Division prior to the commencement of Internet gaming operations, quarterly forthe first year of operations and annually thereafter, and shall include:1. Scope of review;
  54. 54. 542. Name and company affiliation of the individual(s) who conducted the assessment;3. Date of the assessment;4. Findings;5. Recommended corrective action, if applicable; and6. Casino licensee’s response to the findings and recommended corrective action.(r) A casino licensee shall investigate each patron complaint related to Internet gaming andprovide a response to the patron within five calendar days. A copy of the complaint and responseshall be provided to the Division.(s) If an Internet gaming system offers free or demonstration games, the games shall onlybe accessible after log in and have the same payout percentages and odds as paying games.(t) An Internet or mobile gaming system shall not:1. Induce a patron to continue placing wagers when play is in session, when the patronattempts to end a session, or when the patron wins or loses a bet; and2. Have any communication with a patron to intentionally encourage the patron to:i. Increase the amount of play;ii. Wager continuously;iii. Wager winnings; oriv. Attempt to recoup losses.(u) If a patron is prohibited from engaging in Internet wagering because a casino licensee suspectsfraud, cheating, or irresponsible gaming behavior, the casino licensee shall notify the Divisionwithin 24 hours. The Division shall advise all other casino licensees of the patron’s prohibitedstatus. If applicable, a casino licensee shall suspend the Internet gaming account of that patronand prohibit such patron from creating an Internet gaming account.
  55. 55. 55(v) The authorization to conduct Internet gaming shall expire on (seven years from the effectivedate of this chapter).13:69O-1.3 Internet or mobile gaming accounts(a) Prior to engaging in Internet or mobile gaming, a patron shall establish an Internet ormobile gaming account. Any of the following persons shall not be permitted to establish anInternet or mobile account:1. The Governor or Lieutenant Governor of this State;2. Any State officer or employee or special State officer or employee as defined in theCasino Conflicts of Interest Law;3. Any member of the Judiciary;4. Any member of the Legislature;5. Any officer of Atlantic City;6. Any person employed as a casino key employee, and7. Any person prohibited from gaming pursuant to N.J.S.A. 5:12-100n.(b) In order to establish an Internet or mobile gaming account, a casino licensee shall:1. Create an electronic patron file, which shall be encrypted and include at a minimum:i. Patron’s legal name;ii. Patron’s date of birth;iii. Patron’s Social Security number;iv. Patron’s Internet and/or mobile account number;v. Patron’s address;vi. Patron’s electronic mail address;
  56. 56. 56vii. Patron’s telephone number;viii. The method used to verify the patron’s identity; andix. Date of verification.2. Verify the patron’s identity in accordance with:i. N.J.A.C. 13:69D-1.5A and, in addition, record the document number of thegovernment issued credential examined; orii. Other methodology for remote multi-sourced authentication, which may includethird-party and governmental databases, as approved by the Division.3. Require the patron to establish a PIN, challenge questions, and either a password orother access security feature as approved by the Division, provided that, if a patron uses apassword it shall consist of eight or more characters and include a combination consistingof letters, symbols, and numbers;4. Verify that the patron is of the legal age of 21, not self-excluded, on the exclusion list, orotherwise prohibited from participation in gaming;5. Record the patron’s acceptance of the licensee’s terms and conditions to participate inInternet or mobile gaming;6. Record the patron’s certification that the information provided to the operator by theindividual who registered is accurate;7. Record the patron’s acknowledgement that if his or her account remains dormant for aperiod of one year any funds remaining on deposit shall be forfeited;8. Record the patron’s acknowledgement that verifications associated with Internet ormobile gaming, such as those for identity or location, may result in a negative impact on thepatron’s credit report;
  57. 57. 579. Record the patron’s acknowledgement that the legal age for Internet or mobile gaming is21;10. Record the patron’s acknowledgement that he or she is prohibited from allowing anyother person to access or use his or her Internet or mobile gaming account; and11. Notify the patron of the establishment of the account via electronic mail or regularmail.(c) A patron shall have only one Internet or mobile gaming account for each casino licensee. EachInternet or mobile gaming account shall be:1. Non-transferable;2.Unique to the patron who establishes the account; and3.Distinct from any other account number that the patron may have established with thecasino licensee.(d) A patron’s Internet or mobile gaming account may be funded through the use of:1. A patron’s deposit account pursuant to N.J.A.C. 13:69D-1.24;2. A patron’s credit or debit card, which has been registered and verified pursuant to therequirements of the issuer;3. A patron’s reloadable prepaid card, which has been verified as being issued to thepatron and is non-transferable;4. Cash complimentaries, promotional credits, or bonus credits;5. Winnings during a gaming session;6. Adjustments made by the licensee with documented notification to the patron; or7. Any other means approved by the Division.
  58. 58. 58(e) Prior to any cash-out, if a patron used a credit or debit card to fund an Internet or mobilegaming account, any remaining balance in the account up to the amount of the deposit shall berefunded to the patron’s credit or debit card account used to fund the Internet or mobile gamingaccount.(f) Funds may be withdrawn from a patron’s Internet or mobile gaming account for thefollowing:1. The funding of game play;2. Cash-out at the cashier’s cage;3. A cash-out transfer to a patron’s deposit account established pursuant to N.J.A.C.13:69D-1.24;4. A cash-out transfer to a patron’s reloadable prepaid cash card, which was used to fundthe gaming account;5. Adjustments made by the licensee with documented notification to the patron;6. Cash-out transfers directly to the patron’s individual account with a bank or otherfinancial institution (banking account) provided that the licensee:i. Verifies that the name and address on the banking account agrees with the nameand address on the Internet or mobile account;ii. Verifies the validity of the account with the financial institution; andiii. Requires the patron to register the banking account in person; or7. Any other means approved by the Division.(g) A casino licensee shall not permit a patron to transfer funds to another patron.(h) All adjustments to patron accounts shall be authorized by supervisory personnel asdescribed in the licensee’s internal controls.

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